Tech News & Commentary

Apple product lull opens door for Android camp to make gains

Apple is likely to see market share declines in smartphones and TV set-top boxes as competitors roll out new devices this month, taking advantage of a lull in Apple's product cycle.

Apple's (AAPL) iPhone 5S is facing its first serious competition in the high-end smartphone market with the releases of the Samsung Galaxy S5 and new HTC One, both of which use Google's (GOOG) Android operating system.

"With our surveys indicating gradually increasing consumer interest in and pre-order activity for these new Android smartphones, we anticipate new high-end Android smartphones will gain market share vs. the iPhone during the June quarter," Canaccord Genuity analyst Michael Walkley said in a research note Thursday. "We believe Apple will win back meaningful high-end market share during (the second half of) 2014 based on our belief new iPhones with larger screen sizes could create a strong upgrade cycle among Apple's loyal base."

Samsung's Galaxy S5 is set for release on April 11. HTC's second-generation HTC One handset, also known as the M8, hit the market on March 25. Both have bigger screens than the current iPhone 5 series. The Samsung Galaxy S5 has a 5.1-inch display and the new HTC One has a 5-inch screen. The iPhone 5 series uses a 4-inch display.

Apple's next handset, the rumored iPhone 6, is expected to have a larger screen. But it's not due out until September.

Expectations are low for the iPhone 6, so it could end up doing better than expected, Piper Jaffray analyst Gene Munster said in a report Thursday.

"Our meetings with investors over the past month suggested general skepticism that Apple's product cycle will have a meaningful impact on shares of AAPL," Munster wrote. "The logic is the iPhone 6 will be incremental and the new product categories will be less impactful than previous categories (iPhone/iPad).

"Given this widely held belief, we think that buy side expectations for the impact of iPhone 6 and new product categories are relatively low, suggesting upside to shares if the products ultimately are more meaningful. Worst case it seems that an in-line product cycle would mean that shares do nothing."

Canaccord Genuity's Walkley rates Apple stock as a buy with a price target of 600. Piper Jaffray's Munster rates Apple as overweight with a price target of 640. Apple stock was down a fraction, near 538, in afternoon trading on the stock market today.

Apple TV refresh coming

Apple is likely to see market share declines in smartphones and TV set-top boxes as competitors roll out new devices this month, taking advantage of a lull in Apple's product cycle.

Apple's (AAPL) iPhone 5S is facing its first serious competition in the high-end smartphone market with the releases of the Samsung Galaxy S5 and new HTC One, both of which use Google's (GOOG) Android operating system.

"With our surveys indicating gradually increasing consumer interest in and pre-order activity for these new Android smartphones, we anticipate new high-end Android smartphones will gain market share vs. the iPhone during the June quarter," Canaccord Genuity analyst Michael Walkley said in a research note Thursday. "We believe Apple will win back meaningful high-end market share during (the second half of) 2014 based on our belief new iPhones with larger screen sizes could create a strong upgrade cycle among Apple's loyal base."

Samsung's Galaxy S5 is set for release on April 11. HTC's second-generation HTC One handset, also known as the M8, hit the market on March 25. Both have bigger screens than the current iPhone 5 series. The Samsung Galaxy S5 has a 5.1-inch display and the new HTC One has a 5-inch screen. The iPhone 5 series uses a 4-inch display.

Apple's next handset, the rumored iPhone 6, is expected to have a larger screen. But it's not due out until September.

Expectations are low for the iPhone 6, so it could end up doing better than expected, Piper Jaffray analyst Gene Munster said in a report Thursday.

"Our meetings with investors over the past month suggested general skepticism that Apple's product cycle will have a meaningful impact on shares of AAPL," Munster wrote. "The logic is the iPhone 6 will be incremental and the new product categories will be less impactful than previous categories (iPhone/iPad).

"Given this widely held belief, we think that buy side expectations for the impact of iPhone 6 and new product categories are relatively low, suggesting upside to shares if the products ultimately are more meaningful. Worst case it seems that an in-line product cycle would mean that shares do nothing."

Canaccord Genuity's Walkley rates Apple stock as a buy with a price target of 600. Piper Jaffray's Munster rates Apple as overweight with a price target of 640. Apple stock was down a fraction, near 538, in afternoon trading on the stock market today.

Apple TV refresh coming

Apple's iPhone business isn't its only product area seeing fresh competition. Amazon.com (AMZN) on Wednesday launched a set-top box for streaming video that most directly competes with Apple TV.

The launch of the Amazon Fire TV device highlights the necessity for Apple to "aggressively update its Apple TV offering and ultimately introduce a full television," Munster wrote. "Given the breadth of content available on Amazon's offering in addition to gaming capability and voice control, two features we have expected from Apple TV, we believe that Apple will launch at least an updated Apple TV by the back half of 2014 if not sooner."

An Apple television set remains a wildcard product that may or may not happen, Munster said.

The most likely time for Apple to announce an updated Apple TV box would be at its Worldwide Developers Conference, set for June 2-6 in San Francisco, he said.

Possible big-screen iPad

Another possible product coming from Apple is a larger screen iPad tablet, Susquehanna Financial Group analyst Chris Caso said in a research note Thursday.

"Our recent Asia trip indicated a likely October launch for a new 12-inch iPad, with a potential keyboard that could represent a device in between a MacBook and an iPad," Caso wrote. Together with Office for iPad, "these developments continue to erode the necessity of notebook PCs by increasing the functionality of tablets, which are generally cheaper and lighter devices."

The current full-size iPad has a 9.7-inch display.

Microsoft (MSFT) on March 27 introduced a version of its Office productivity software for Apple's iPad tablets.

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